Fine-Tuning Budget Puts Bluegrass Fest Under Fire

Whether or not bringing a Western Swing Festival to Canton in February 2009, and whether or not the Bluegrass Festival made an impact to the city’s economy were brought into question during a called city meeting Monday night while discussing plans for the new fiscal year budget.

The Free State Bluegrass Music Festival, which has been hosted in Canton for more than 30 years, began losing money several years ago when council member Jim Fuller was asked to come back and help take over the festival.

"On an average that festival has lost $10,000 a year," city manager Andy McCuistion told the council. "But that’s not the whole story. There was an economic impact from that festival."

Council member Charles "Sonny" Huddle questioned McCuistion on being told prior that the city lost $21,000 on the festival.

McCuistion said in 2007, a $10,000 money bag was misplaced and then found in 2008, in the back of a truck.

An impact study was produced in-house and presented by Canton Economic Development Corporation Director Mercy Rushing during the special meeting.

After receiving figures from the city, gathered from receipts that were turned in to Fuller during the festival from festival goers, Rushing drew up her study.

She explained to the council that festival goers are encouraged to turn in their receipts signed on the back, from purchases made in town while visiting Canton during the festival, in exchange for a chance during the festival to win a $25 gift certificate, etc.

Rushing said the Texas Tourism Division usually uses a multiplier formula of seven, figuring that the dollar turns over seven times in a community; however, she said trying to be conservative she used the figure five as a multiplier.

She then estimated that 50 percent of the people turned in receipts, and then based on receipts turned in by Fuller of $8,588.37, that money was going back into Canton businesses.

Rushing then multiplied that figure times five to get $42,941.85.

"This brought in new people into your community and after talking to Mr. Fuller he estimated that probably only five percent of these people were local," Rushing said, adding that the figures don’t account for the hotel/motel tax, sales tax, and other factors.

McCuistion explained that of the budgeted money for the festival, an estimated $47,000 went toward paying for the Bluegrass musicians.

"Anytime we have an opportunity to bring in people from outside the community to spend their money inside the community, if it only costs us $10,000," Wilson said. "…Anytime we have that kind of an opportunity to bring an impact to the community where they come in, spend their money here and leave town and the money turns over here, then we really need to look at continuing to do something like that."

Resident Ron Perkins said he went by the Bluegrass Festival two days and counted the RVs in the parking lot and observed about 175 to 200.

"I find it very difficult to believe that those people are going to leave their RVs and go out into the city and eat and go out into the city and buy a motel room," Perkins said. "We went out and did an independent survey and we didn’t see an increase in the restaurants or motels."

Perkins then asked if there was a way of tracking the hotel/motel tax for that particular weekend or any festival.

Fuller said attendance was down at this year’s festival and there were less RVs.

"When the Bluegrass Festival is here, that is when First Monday is going into it’s summer slope, so it is good to have something in Canton," council member Ross Maris said. "It helps the restaurants and motels."

Resident Lou Ann Everett asked Fuller if he was paid for his work on the festival, and he commented he was not.

"I have the largest group of volunteers in Canton," he said.

The city pays Fuller’s expenses, except his meals, as he travels to book groups and promote Canton and the festival each year.

He is provided gasoline and a trip to the International Bluegrass Music Association festival to book groups and hear new talent.

Perkins asked if there was a formula or itemized budget for the festival and he was told it was a single line item in the budget.

"When we are talking about expenses getting out of control 30 or 40 percent of the proposed budget, it is kind of a scary situation for the citizens because that is not too much more than we are talking about these rate increases," Perkins said.

Another budget item brought into question was the Western Swing event set for February 13-14, 2009, that the city budgeted for $50,000 in revenue and expenses.

The Western Swing, McCuistion told the council, would replace the antique show that lost money last year.

The Western Swing, another special event which Fuller is promoting and booking for the city.

"Western Swing is bigger than we think about it being," Fuller said.

He went on to say he has bands and sponsors booked for the February 2009 show.

"Are we really in to the special events business like other cities?" Huddle asked.

"Why would we not?" Fuller asked.

"Because we are losing money?" Huddle said.

"At least we are trying to bring some money from outside. If we are able and successful then the entire community will benefit," Wilson commented."

There was $20,000 budgeted for the antique show and it lost approximately $10,000 last year.

"City’s all over, especially small city’s are always looking at ways to do economic development," Rushing said. "Canton is very lucky that you have First Monday…There is no such thing as staying status quo first of all. You are either going up, or you are going down."

She went on to comment that festivals aren’t set up to make money, but to bring in people, and tax dollars.

"…Even if we take a little loss, if we bring revenue in for the businesses on the square, on the Interstate, the motels and restaurants…if we can break even we’ve done great, because the economic impact on the sales tax, and the hotel/motel tax and keeping these businesses giving us extra revenue during the month is the goal of the economic development," Maris said.

"The name of the game is increasing your sales tax revenue," Wilson said.

Huddle made a motion to remove the Western Swing item from the budget, it was seconded by council member Clay Nicklas.

The motion failed, with Ron Sanford, Maris and Fuller voting against removing it from the budget.

Wilson asked Fuller if he wanted to withdraw his vote, but Fuller said, "I think I have every right to vote, because I don’t make any money from it."

"As a precise definition, this may not be a conflict of interest, but it has all the appearances of a conflict of interest and sometimes perception is reality," resident Cary Hilliard said.

When it was questioned whether or not Fuller would be eligible to vote, city attorney Richard Davis said, "If this is a volunteer deal, where he is not in it to make money, it does not have a conflict of interest."

The Western Swing event stayed on the budget.